The term, “commercial bridge loan” normally applies to the use of the funds instead of the source of the funding or the guidelines which are imposed during the transaction. In a sense, all commercial loans could be bridge loans. Nevertheless, normally, the term is associated with programs that fall into the unconventional realm of financing. A great example is when a borrower lacks enough money equity in an enterprise property; he or she could seek a commercial bridge loan with a 14 percent interest rate and from three to 5 points. Even so, if he or she could make as significantly as a 30 percent down payment, the borrower may qualify for a conventional mini-perm loan from a bank at up to 3 percent over prime and one point.
Commercial Bridge Loans seem to be the perfect way to get money to purchase your new house before your existing house sells out. Before you go for the lucrative loan program, it is advisable that you should consider a few essential things that are associated with this type of loan.
As the term suggests, commercial bridge loan bridges the gap in funding that you require for purchasing your dream house. All you need to do is to start the process of selling your existing house while you purchase the new house as quickly as possible. However if you have just started the process to sell or even purchase the new house, there is every possibility that you will not be qualified for bridge mortgage. It is vital to remember that you have to show your lender who offers this type of fund that you have the capacity to pay the mortgage as quickly as possible. Once you are qualified for this type of funding, you can get the requisite fund without any delay.
Get money for the new house
When you buy a new house, you would at the same time try to sell your old house to get the necessary fund. One is not able to sell the house that one already posses, but you have to meet the deadline to buy your new house. This type of fund allows you to meet the deadline and you will be able to get sufficient amount of money to buy the new one.
These loans offer numerous benefits to the borrowers. This type of fund allows you to save your time since it is perfectly designed to have to fund for your new house when your old house has already been sold out, but its settlement will only happen when the buying procedure of your new house is complete. The major benefits of this type of fund are that this type of loan helps you to use net equity from your current house sale before it is being taken in, as your new house’s down payment.
Simple repayment structure
The repayment time for this kind of fund is one year or even less than that, and you have to keep this thing in mind when you borrow it. With this kind of loan, all the borrowers get the scope to repay it either after or even before permanent financing become secured. For example, if you repay the loan before the scheduled period, you either have to repay the amount completely or even in structured payment modes over fixed period. When you wish to make payment on time, there is the possibility that credit rating can be improved that make you quite eligible to secure a loan that otherwise you will fail to get qualified under normal circumstances.
Avoid commercial foreclosure by getting a commercial bridge loan today!